|12-21-2014, 10:09 PM||#1|
Al Naimi: Speculators, non-OPEC were behind oil`s slump
The oil minister of Saudi Arabia, Ali Al Naimi said on Sunday that the actions of speculators and the non-cooperation of global producers aside from the Organization of the Petroleum Exporting Countries (OPEC) was the reason behind the oil price slump.
Al Naimi dismissed the role of politics in Saudi Arabia’s oil policy, adding that the price decline would not make “a noticeable and big” impact on Gulf countries and especially Saudi Arabia while also saying that he still has confidence the market would recover.
Saudi Arabia and other Gulf states do indeed have enough financial reserves to sustain the economic impact of the current fluctuations in the oil market.
"The kingdom of Saudi Arabia and other countries sought to bring back balance to the market, but the lack of cooperation from other producers outside OPEC and the spread of misleading information and speculation led to the continuation of the drop in prices," he said.
“The talk about conspiracy by Saudi Arabia for political motives … is baseless and shows lack of understanding,” Al Naimi said in a press conference in Abu Dhabi.
He then added that the oil policy of Saudi Arabia is strictly based on economic basis.
OPEC’s own forecasts entail that world demand for its oil will fall to 28.9 million barrels per day next year.
The stance of Saudi Arabia is clear, and they are not putting that much of a fight over market share as the hype over it shows.
Saudi Arabia’s output threshold in the global markets has not changed for many years, as well as OPEC’s quota, which is at the level of 30 million barrels a day.
The increased production from producers outside of OPEC is however rising, even where the production costs are higher.
Whether that lower oil prices will deter higher-cost producers such as North American shale oil extractors is still to be determined, and that in turn will be reflected on oil market.
OPEC is not planning any emergency meetings anytime soon, so the market is now in the hands of supply and demand, global growth conditions, and how long can producers take the pressure from lower prices.
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